(Scrap Monster): The demand for flat steel products may outpace long steel products in the coming years, especially in China. The prospects in automobile, ship building, machinery building and construction sectors will fuel the demand for flat products.
According to a new report, China, the world’s largest steel producing and consuming industry accounted for nearly half of the total global steel production in 2010. The steel industry in the country has traditionally been focusing on long steel products.
However, the demand for flat products will outpace long products in the coming years. The research anticipates that the apparent consumption of flat products will grow at a CAGR of over 10% during 2011-2014.
The main reason for the rising demand for flat products, such as steel strips and sheets, is growing automobile, ship building, and machine building sectors. Along with this trend, various other strong fundamental drivers will enable this industry to sustain its upward growth trend in the coming years.
Although the global economic crisis negatively affected various steel intensive industries, the Chinese government’s stimulus package helped it to boost economic growth by injecting funds in various industries, such as construction, infrastructure, automobile, and power.
Meanwhile, Barclays Capital said that it is now "highly unlikely" that flat steel prices will rise by the full 10% planned by the mills, adding "we view a second round of increases as highly improbable." Cost pressures from steelmaking raw materials will persist, Barclays analysts said.
Flat steel imports into Brazil surged in 2010 to 4.06 million tons, up 172% over 2009, representing more than a third of local consumption, and depressing mills' output in the latter part of the year, according to Brazilian Steel Institute IABr.
The demand for flat steel products in Brazil, used in the construction, automotive and home appliance industries, should grow about 4% this year, according to INDA.
The Chinese Long Product Price Index CLPPI up by 47 points on April 11th 2011 whereas the Chinese Flat Products Index CFPPI up by 53 points. The overall price index CHISPI up by 50 points. The Indian Long Product Price Index ILPPI is up by 19 points on April 13 whereas Indian Flat Product Price Index IFPPI remains flat. The overall Indian Steel Price Index INDSPI up by 11 points.
Meanwhile, Alcoa Inc, the largest U.S. aluminum producer which reported strong first-quarter profits, said it expects increased demand for flat-rolled products to continue into the second quarter.